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Appellate court backs STB's branch-line embargo decisions


U.S. Court of Appeals for the Eighth Circuit Aug. 28 upheld Surface Transportation Board's decision pertaining to several disputes over an embargo implemented by Arkansas Midland Railroad Co. (AMR) due a branch line damaged by storms in 1993 and 1994.

Several shippers on AMR's 52-mile Norman branch line wanted the short line to immediately fix the damage and resume service, but AMR instead decided to abandon that portion of the line.

Caddo Antoine & Little Missouri Railroad Co. (CALM), a new railroad affiliated with the shippers, then asked STB-predecessor Interstate Commerce Commission to force AMR to sell the branch to CALM and enable the railroad to immediately begin operations. The shippers also filed a complaint seeking damages from AMR.

STB in May 2000 set a purchase price for the forced sale, awarded AMR compensation for CALM trains that operated over a line portion still owned by AMR and awarded the shippers $200,000 in damages.

AMR then sued STB claiming the purchase price was set too low; CALM and the shippers also sued the board claiming CALM's trackage fees were too high and the damages, too low.

The U.S. appellate court ruled that STB acted properly when setting the purchase price and that the board properly assessed damage compensation.

However, the court also ruled that STB erred by failing to award one of the shippers lost profits tied to an alleged fixed-price contract to ship granules to Houston, and sent the issue back to the board for resolution.

Contact Progressive Railroading editorial staff.

More News from 8/30/2001